Murkowski Says Construction Industry Unfairly Singled Out in Health Care Bill and That Oil and Gas Industry Could be Particularly Affected

Published: December 24, 2009

WASHINGTON, D.C. - U.S. Sen. Lisa Murkowski, R-Alaska, says that the construction industry has been unfairly singled out - and penalized -- in the health care bill that the Senate is expected to pass on Thursday.

Murkowski, who plans to oppose the health legislation, said the construction industry provision was tucked deep inside the 2,733-page bill, and apparently had not drawn any scrutiny until she raised it in a floor speech Tuesday evening. Murkowski said she became aware of the provision after being contacted by the Anchorage Home Builders and the Alaska State Home Building Society.

The bill does not specify which types of construction businesses would be affected, which means that federal bureaucrats will be choosing winners and losers should the Senate health care bill become law. Since the Department of Commerce's Bureau of Labor Statistics utilizes the North American Industry Classification System (NAICS), it is likely that oil and gas pipeline construction companies would be among those businesses forced to comply with the provision. That could be especially devastating to Alaska's oil and gas industry.

Under Majority Leader Reid's original health care bill, businesses with 50 or fewer employees were exempted from providing health insurance to their employees. But the Reid bill was amended at the last minute to include a new provision that removed the exemption for construction companies, forcing them to provide health insurance if they have five or more employees. Murkowski said she didn't know why the provision was included in the bill, which was written behind closed doors in the Majority Leader's office.

"Clearly, this could be destructive for a number of businesses in Alaska," Murkowski said. "The economic downturn has severely affected the homebuilding industry and related construction industries which employ thousands of Alaskans, so to single these industries out is unconscionable."

See letter below from construction groups opposed to the provision.

December 21, 2009

The United States SenateWashington, D.C. 20510

Dear Senator:

We are writing to express our strong opposition to language contained in the Manager's Amendment to H.R. 3590, which excludes the construction industry from the small business exemption contained in the bill. We regret that this is our first opportunity to address this issue, though the fact that the Manager's Amendment was made public less than two days before the first vote on the matter has increased the difficulty of playing a constructive role in the legislative process.

In recognition of the negative impact that a mandate to provide health insurance will have on employers, H.R. 3590 exempts employers with fewer than 50 employees from the fines levied on those who cannot afford to provide their employees with the federal minimum standard of health insurance. However, the Manager's Amendment singles out the construction industry by altering the exemption so that it applies to only those firms with fewer than 5 employees.

This narrowly focused provision is an unprecedented assault on our industry, and the men and women who every day make the bold decision to strike out on their own by starting a business. Our members' benefit packages reflect the reality of their business models, and they proudly offer the best health insurance coverage that they can afford. It is unreasonable to presume that small business owners can bear the increased cost of these new benefits simply because Congress mandates that they do so.

In the real world, where the rhetoric surrounding this legislation will meet the stark reality of the employer struggling to make payroll, this special interest carve out is simply another bill to pay in an industry that, with an unemployment rate exceeding 18% and more than $200 billion in economic activity lost in the past year, already is struggling to survive.

And, we would be remiss if we failed to question the justification for singling out the construction industry to bear such a burden. We are unaware of any data or evidence that suggests that the needs and struggles of a construction contractor with fewer than 50 employees are so different from those of small business owners in other industries, and absent such convincing evidence, we are left to assume that this specific provision is merely a political payoff to satisfy the desires of a small constituency.

As Congress moves forward in the legislative process for H.R. 3590, we strongly encourage you to address this onerous provision that needlessly single out small construction industry employers.